REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

Revenue is recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware products bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of the product transfers to the customer. The transaction price allocated to the SaaS offering is recognized ratably beginning when the customer is expected to activate their account and over a three-year period that the Company has estimated based on the expected replacement of the hardware.

Transaction Price Allocated to the Remaining Performance Obligations

The remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

Contract costs

The Company recognizes the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year. The Company has determined that certain sales commissions meet the requirements to be capitalized, and the Company amortizes these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our condensed consolidated balance sheets.

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. These costs include sales commissions on SaaS contracts with a contract period of one year or less as sales commissions on contract renewals are commensurate with those paid on the initial contract.

Contract Balances

The Company records accounts receivable when it has an unconditional right to the consideration. Contract liabilities consist of deferred revenue, which represents payments received in advance of revenue recognition related to SaaS agreements and for prepayments for products or services yet to be delivered.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.

The following table reflects the contract balances as of the periods ended:

	March 31,		December 31,
	2023		2022
Deferred revenue, current	$	629,691	$	633,542
Deferred revenue, noncurrent	$	896,990	$	771,738

During the three months ended March 31, 2023, the change in contract balances was as follows:

Balance at December 31, 2022	$	1,405,280
Billings		296,264
Revenue recognized		(174,863	)
Balance at March 31, 2023	$	1,526,681

Disaggregation of Revenue

The following table sets forth our revenues by distribution channel:

	Three Months Ended March 31,
	2023		2022
Retailers	$	10,281,349	$	12,341,289
Distributors		44,964		307,207
Other		425,472		650,759
	$	10,751,785	$	13,299,255

The following table sets forth our revenues by product:

	Three Months Ended March 31,
	2023		2022
Cable modems & gateways	$	10,574,055	$	12,883,047
Other networking products		91,631		272,566
SaaS		86,099		143,642
	$	10,751,785	$	13,299,255